Data show signs of a transitioning housing market
Multiple indicators point to slight housing demand easing and an improvement in the inventory crunch. The market is expected to remain robust with more choices for buyers.
- The days a home spends on the market before selling has been flat since April. That signals demand is strong but not increasing at last year’s pace.
- June’s pending sales declined from May. Since sales go under contract 30 to 60 days before they close, pending sales typically lead existing-home sales by about two months.
- June’s closings dipped below last year’s total. It’s a sign this year’s sales are struggling to sustain the blistering pace set during the second half of last year.
- New listings have slowly increased since the first of the year. During most of that time, pending sales outnumbered new listings erasing any inventory gain. That shifted in April when they balanced each other. New listings outnumbered pending sales in June. It wasn’t a big gain, but the trend points to some inventory relief.
- Month-end active inventory has increased for the past three straight months. Again, the gains are not big enough to make a dramatic change, but the trend points to a transition.
There are a couple of drivers for this trend. Some buyers are pushing back on higher prices. Sellers who have been holding back have decided now is the time to sell before the market cools off too much. And housing experts like NAR’s Chief Economist Lawrence Yun expects the market to resume some normal seasonal slowing.
A slightly cooler market and more inventory could also set the stage for a monthly spike during the early winter season. In years past, that spike has shown up in November’s closings. There are still a lot of eager buyers including out-of-area residents and a large cadre of local Millennials who are now in their prime home-buying years.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us